International Business Machines (IBM) / 2001 Settlement (Argentina)
International Business Machines (Argentina)
United States
Securities and Exchange Commission
Legal Person
Consent to Cease-and-Desist Order
Civil Penalty
Art.16, Art.23, Art.26
Art. 1, Art. 2, Art. 7, Art. 8
Falsification of books and records
No admission or denial of allegations
According to the US Securities and Exchange Commission's Litigation Release, "Without admitting or denying the allegations in the complaint, IBM consented to the entry of a judgment ordering IBM to pay a $300,000 penalty. The Order finds that IBM violated Section 13(b)(2)(A) of the Exchange Act in connection with a $250 million contract to integrate and modernize the computer system of a commercial bank owned by the Argentine government. According to the Order, certain former senior management of IBM-Argentina, S.A. ("IBM-Argentina"), a wholly-owned subsidiary of IBM, caused IBM-Argentina to enter into a subcontract with Capacitacion Y Computacion Rural, S.A. ("CCR"), and money paid to CCR by IBM-Argentina in connection with the subcontract was apparently subsequently paid by CCR to certain bank officials. Specifically, the Order finds that, during 1994 and 1995, IBM-Argentina paid CCR approximately $22 million under the subcontract, of which at least $4.5 million was transferred to several bank directors by CCR." (Source: Securities and Exchange Commission, Litigation Release No. 16839 / December 21, 2000, SEC v. International Business Machines Corporation, Case No. 1:00-cv-03040-JR (D.D.C.), "SEC Settles Foreign Corrupt Practices Act Case against IBM.")